If you have a set budget for your project and you’re currently exceeding it, then it’s unlikely that you’ll get it back under budget unless you do something about it. So here are 7 tips to help you do just that:
Take a helicopter view
First summarize all of the expenditure on your project to date vs. the expenditure you planned at the start. Then quantify the amount you have exceeded your budget by. If you’re more than 10% over budget in total, then you need to take action.
Next, review your actual spend vs. planned spend per week. Have you always been spending more money than you had budgeted, or is it only in the last few weeks? Then narrow down the cause of the problem. Was it that your budget was flawed, or have you experienced problems that were unexpected?
Now take the first step towards saving costs by determining whether you can use cheaper suppliers, equipment or materials. These types of costs usually consume a lot of your budget, so it’s worth reviewing them in detail. You can also save money by reducing the number of contract or administrative staff assigned to the project.
The best way to save money is by reducing the scope of the project. Identify deliverables that you believe are non-critical to the project and negotiate with your customer to remove them from scope.
One place that unbudgeted spend usually occurs is in the area of change control. Review all of the project changes currently requested and only approve those requests which are absolutely necessary from this point onwards.
You may also be able to save costs by removing non-critical tasks from the project plan. Typically, project managers can save 10-15% of their budget by removing tasks that aren’t critical.
Motivate your team and they will complete more tasks within the same period of time. This will save you a percentage of staffing costs, which are usually one of the largest cost areas of a project manager’s budget.
By taking these tips seriously, you will be able to reduce project costs and ensure that you deliver successfully under budget.